Fed Cuts Rates by 25 Basis Points

August 21, 2001 (PLANSPONSOR.com) - In a bid to revive sluggish US economic growth, the Federal Reserve cut its key federal funds interest rate by a quarter of a percentage point.

The cut to 3.50% was widely expected by the market, and marks the seventh time this year that the Fed made cuts to loosen monetary policy, including two inter-meeting slashes in January and April.

So far, this has done little to buoy a market beaten down by negative news, lackluster economic data and earnings disappointments.

And while this latest cut may leave investors equally unimpressed, many will try to read between the lines of the FOMC’s accompanying statement  for clues on the Fed’s next move.

In anticipation of the announcement, the market had climbed modestly in early trading, with financials rising across the board.